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The game of debt-ceiling chicken

The House floor stands empty despite members of Congress' promise to work day and night until the negotiations over the looming debt ceiling are reached. Capitol Hill is playing with fire, reports Nancy Cordes.

The House floor stands empty despite members of Congress' promise to work day and night until the negotiations over the looming debt ceiling are reached

Over the last week the news has been dominated by Rep. Anthony Weiner's sexting, Newt Gingrich's staff defection, Sarah Palin's correspondence, Defense Secretary Gates parting words for NATO and the struggling Arab Spring.

The U.S. economy has also been a major story. The jittery stock market dipped below 12,000, spooked by the soft job market, depressed home sales and flagging consumer confidence. And, looming over the American economy like a dark cloud is the impending debt-ceiling deadline.

According to the U.S. Treasury, the $14.3 trillion debt ceiling was exceeded in April, but accounting procedures will finance obligations through Aug. 2. Moody's Investors Service and other ratings agencies are considering a downgrade of the United States credit rating if Congress doesn't find a way to increase the debt ceiling.

Laurence Meyer, a former member of the Federal Reserve Board of Governors, told CBS News, "It's playing with fire because we know that the markets are going to get more and more concerned and there is going to be more turbulence, there is going to be more impact on equities and rates etc."

In the midst of this growing uncertainty, Congress is playing a game of chicken with the debt ceiling, waiting until the last minute to resolve the impasse. As CBS News' Nancy Cordes reported, "It's not that Congress doesn't understand the urgency--it's that Congress is conditioned into waiting until the 11th hour. Back in April, Congressional leaders averted a government shutdown by mere minutes - but not before leaving tens of thousands of federal workers in the lurch."

Democrat and Republican lawmakers, including Vice President Biden, met on June 9 for a few hours, but the two sides are far apart. The Republicans are advocating for $2 trillion in spending cuts, and the Democrats believe that new revenue (taxes) has to be part of the solution. Republicans are talking about equalization-- every $1 dollar in deficit reduction to be accompanied by a $1 increase in the debt ceiling.

As a side note, a recent CBS News/New York Times pollshowed that 63 percent oppose raising the debt ceiling and only 27 percent of Americans support raising it. A Washington Post-ABC News poll found that 55 percent of Democrats and half of Republicans and independents were in favor of debt-limit deal, but it would have to include major government spending cuts.

The empty halls of Congress--the House was out of the office last week --doesn't mean that the economy and the debt ceiling are not occupying the minds of lawmakers. But the game of debt-ceiling chicken is not instilling confidence in the markets or the voters. In fact, it comes off as cynical in that the opposing sides of the debt-ceiling debate cannot resolve the issue with haste, knowing that their constituents, and the country's, well-being are at stake.